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Just as any business owner, when you run a farm, it’s important to protect your operations and livelihood from unforeseen events that can cause significant financial burden. This requires purchasing adequate farm insurance. To make sure you get the best deal—without cutting corners on coverage—you must understand how rates are determined. Here are a few of the top factors that influence the price of your policy.

How Farm Insurance Premiums Are Calculated 

1. Location 

The location of your farm will have a considerable impact on how much you pay for coverage. Properties that are located in areas prone to extreme weather, such as flooding, tornadoes, hurricanes, and drought, have a higher likelihood of experiencing loss. In turn, this will translate to higher insurance premiums. Insurers will also assess the area’s crime rates to evaluate the probability of theft and vandalism. 

2. Risk 

farm insuranceFarming is a naturally risky business, but certain conditions can make your operations even riskier to insurance companies. For example, having employees, using heavy machinery, and offering agritourism, will all increase your risk exposure. Understandably, the more hazards that are involved in operating your farm, the more you can expect your coverage costs to be. 

3. Claim History 

If you’ve filed any claims in the past, there’s a chance that insurers will consider you to be more of a liability. Although you will still be able to secure farm insurance, you may see your rates rise based on previous incidents. It can help to show documentation explaining the nature of your other claims to prove they were necessary and not frivolous filings. 

 

For more information on what affects farm insurance premiums and how to keep costs manageable, turn to Farmers Mutual Insurance Association of Osceola County. They will help explore all of your options and use their vast industry knowledge to customize a policy that fits your farm’s unique needs. Having served residents throughout Osceola, Sioux, and Clay counties in Iowa for more than a century, they are well-known for providing quality coverage solutions at an affordable rate. Call (712) 754-3654 to request a quote, or visit them online to view their various product offerings. 

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